This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Dicker: Mosul Falls to Insurgents in Iraq -- Now What Happens to Oil?

Stocks in this article: BPRDS.AXOM

NEW YORK (TheStreet) -- I was talking to Jim Cramer about the fall of Mosul in Iraq and whether this military turnaround would have a destabilizing effect on the oil market.

The truth is that only 17% of the oil production from Iraq comes from the North where all the fighting has been going on, and the largest single producing field there is the Kirkuk "superfield." But Kirkuk is very far north, near the Turkish border and so far not being threatened by insurgents.

What is more important about the quick fall of Mosul has been the weak response from the Iraqi military and the relative ease with which the Iraqi/Syrian Islamic forces (ISIS) retook grounds the U.S. military fought so hard to capture. The political question is whether Iraq is now on the precipice of falling totally apart and about to revert to full-scale civil war and a total fall of the Al-Maliki government.

What will happen first, and what will have an impact on the oil markets, will be the extent of further activity of the insurgents and response from the government. If further ground begins to be lost in the South threatening the major oil fields there, we could see a real reason for rocketing oil prices.

What is immediately true is the strong production growth from Iraq that had been expected to emerge is now on a far back burner. Total Iraqi production had only recently increased above 3.5 million barrels a day threshold with hopes of a further increase of 1.5 million barrels a day over the next year and a half. Those hopes are now entirely dashed as no further capital investment is likely in an environment as incendiary as the one in Iraq right now.

I talk more about the oil picture in Iraq with Jim in the video above.

At the time of publication the author was long BP.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

>>Read more: Boeing Stands to Benefit from Emirates' Cancellation of Airbus Order

Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,380.41 +263.17 1.63%
S&P 500 1,886.76 +24.00 1.29%
NASDAQ 4,258.4380 +41.0480 0.97%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs